SUMMARY JUDGMENT

This
adversary proceeding is before the court on cross-motions for Summary
Judgment.(Documents # 21, 23, &
24).The parties having filed
Stipulation of Facts (Document # 18, also see Document # 31), which facts are
incorporated herein as if set out at length, and the court being sufficiently
advised finds specifically the following:

1.The court has jurisdiction of this matter,
and this is a core proceeding.

2.In a policy effective January 1, 1999, Life Insurance Company of North
America (ALICNA@) issued Policy No. LK-030043 to Osram Sylvania, Inc.,
which provided group long-term disability insurance.James T. Shepherd (AShepherd@), as an employee of Osram Sylvania, Inc., was covered
under this policy (Athe Policy@).

3.Shepherd became disabled and made a claim
under the Policy.

4.According to the Policy, as a third-party
beneficiary and as an employee of Osram Sylvania, Inc., Shepherd was entitled
to receive certain benefits.Additionally, his gross benefits were to be reduced by a percentage of
amounts he received from any governmental sources, specifically Social Security
Disability or Retirement Benefits.

5.Under its operating procedures, as a service
to covered beneficiaries, LICNA offered to pay the gross amount of benefits to
employees covered by the Policy while they awaited award and payment of Social
Security benefits.LICNA reached an
agreement with Shepherd dated May 15, 2000 that he would receive his gross
benefits but would immediately advise LICNA of his award payment of other
benefits.Under the agreement Shepherd
then would repay or have withheld from future benefits the percentage of the
Social Security award.The alternative
was to estimate Social Security benefits and withhold them from the beginning.

6.Upon award and payment of his Social
Security benefits, Shepherd advised LICNA of the amount and payment of those
benefits.LICNA computed the
overpayment of award at $7,465.10 and by letter dated November 29, 2000 allowed
Shepherd to review the calculations and agree or disagree.LICNA having received no response from the
debtor, Recovery Services International (ARSI@), LICNA=s recovery
agent, sent a letter to Shepherd dated December 13, 2000 seeking recovery of
overpayment on the long-term disability policy.

7.On or about January 11, 2001 Shepherd mailed
a check to RSI in the amount of $6,454.10.The check was dated January 8, 2001 and was stamped Areceived@ on January
16, 2001.Bank Aimage
statement@ notes the
check was paid on January 23, 2001.

8.On January 29, 2001 Shepherd and his wife,
Judy Rose Shepherd, filed in this court a petition for relief under chapter 7
of the U. S. Bankruptcy Code.

9. On or about August 20, 2001, James W.
Gardner, duly appointed and qualified chapter 7 trustee for the bankruptcy
estate of the Shepherds, initiated this adversary proceeding to recover the
$6,454.10 paid in January 2001.

Based upon
the foregoing, the court concludes as follows as a matter of law:

1.The requirements under 11 U.S.C. ' 547(b) for
a Avoidable
preference@ are
satisfied in this transaction between Shepherd and LICNA.

2.The issue is whether this transaction
occurred within the Aordinary course of business@ and is
therefore an exception to 11 U.S.C. ' 547(b) pursuant to ' 547
(c)(2).

3.The transaction between Shepherd and LICNA
satisfies three requirements for deeming it to be in the Aordinary
course of business.@

4.First, the payment was for a debt incurred
in the course of ordinary business dealings between Shepherd and LICNA.In re Carled Inc., 91 F.3d 811, 813
(6th Cir. 1996).Both
Shepherd and LICNA were engaged in their usual business as insured and insurer
pursuant to the contract.The debt was
incurred according to the specific language of the insurance policy, and
payment of the debt was in compliance with that policy.

5.Second, the debt and the payment were
ordinary in relation to other business dealings between the debtor and
creditor.In re Carled, 91 F.3d
at 813.The fact that the payment was a
one-time or first time transaction does not automatically exclude it from being
in the Aordinary
course of business.@In re Finn, 909 F.2d 903, 908 (6th Cir. 1990).Thus, the reimbursement payment made by
Shepherd to RSI was Aordinary@ despite
the fact that it was a first time occurrence.The timing, amount, and manner of payment as well as the circumstances
under which it was made all indicate that the transaction was ordinary between
the parties.In re Russell Cave Co.,
Inc., 259 B.R. 879, 882 (Bankr. E.D.Ky. 2001).Stated another way, there was nothing unusual about the
transaction between Shepherd and LICNA which disqualifies it from the Aordinary course
of business@ exception
to subsection 547(b).Shepherd paid
$6,454.10 of the $7,465.10 calculated by LICNA, in 43 days of the request for
payment by LICNA and within 30 days of the request by RCI.

6.The third, and final, prong of the Aordinary course
of business@ test is
whether the payment was made according to ordinary business terms.In re Carled, 91 F.3d at 813.To meet this prong, the defendant must show
that the transaction Acomports with the standard conduct of
business in the industry.@In re Russell Cave, 259 B.R. at 883.Insurers generally do not permit double
recovery of any kind, and they routinely recover overpayments pursuant to the
terms of their policy.LICNA=s recovery
was standard conduct for the insurance industry.

7.Defendant LICNA also asserts the theory of
recoupment.An elemental requirement of
this theory is that the parties be the same, that there be mutuality of
identity of parties.The recoupment
theory asserted here fails because the initial payee, RSI, was a true third
party to the transaction.In other
words, the recoupment theory does not apply in this factual situation because
the preferential payments were made to RCI, not LICNA.

8.The court having found for LICNA on the
preferential transfer issue, LICNA=s request for alternative relief--
reduction of future benefits-- is moot.

Based upon
the foregoing, the court concludes that there are no material issues of fact
and that the defendant is entitled to summary judgment against the plaintiff as
a matter of law.Shepherd=s repayment
was made in the Aordinary course of business@ and
therefore is a valid exception to the Avoidable preference@ doctrine
of 11 U.S.C. ' 547(b).Accordingly, the plaintiff=s motion for summary judgment is
overruled.